Senate approves AB 1138 to expand film and TV tax credits with urgency clause

AB 1138, a bill to expand and modernize California's film and television tax credit program, passed the State Senate with an urgency clause on July 3, 2025, sending the measure to the governor. Senator Ben Allen, the bill's floor author, led the presentation; the roll-call on the urgency clause showed 32 ayes and 2 nos, meeting the 27-vote requirement for immediate effect.

Supporters said the expansion will boost production and related jobs across the state. Senator Allen (author) told colleagues the bill builds on recent state action and a newly signed financing package and said it includes incentives targeted to encourage productions outside the Los Angeles area and to add animation to eligible production types. Senator María Elena Durazo and other supporters said the bill will help retain and attract studio investment and spur private-sector construction of soundstages.

Opponents questioned whether tax credits are the best use of state funds. Senator Brian Niello rose in respectful opposition, citing a Legislative Analyst's Office assessment and arguing that production tax credits are a transient subsidy and may not increase the statewide economy in the long term. Niello contrasted credits for production with incentives for permanent facilities such as manufacturing.

Supporters replied that the program produces ripple effects across local businesses and union employment. Senator Josh Rubio, Senator Maria Valadares and others described benefits to local vendors, schools and small businesses when productions film locally. Senator Susan Small Requivas and Senator Stern emphasized equity provisions in AB 1138, including expanded tracking of worker zip codes and veteran status to improve access for historically underrepresented workers and to strengthen training and nonprofit partnerships.

The bill's urgency clause was called and the secretary conducted a roll call. The clerk announced the urgency vote'''''''''''''''''''''''''''''''''''''''''''''''''''''''

Supporters said the program complements private-sector investment: Allen described a new multimillion-dollar soundstage under construction and said the expanded credit and recent funding increases will encourage similar projects. He also noted a special uplift for productions filmed outside Los Angeles and said the bill will include measures to strengthen career pathways and reporting so public investment can be tracked against local hiring outcomes.

The Senate recorded the urgency vote as: ayes 32, noes 2; the measure then passed on final actions later in the session and will take effect immediately if the governor signs it (the bill contains an urgency clause). The bill was presented as a joint authoring effort with Assemblymember Rick Chavez Abur and was described on the floor as negotiated with studios, labor and other stakeholders.

Supporters framed AB 1138 as protecting California's long-standing entertainment industry and growing jobs in communities across the state. Opponents cautioned about opportunity cost and urged attention to other state policies that affect business costs. The Senate record shows the measure cleared the chamber under the urgency provision and will become law if signed by the governor.

Votes at a glance: On the urgency clause for AB 1138, ayes 32, noes 2; the measure passed the Senate with the required votes to take immediate effect if the governor signs it.